Why Coach Is Plunging Right Now

Coachplunged in pre-market trading on news of a "challenging" holiday quarter. The company is seeing a constricted consumer, waning appetite for aspirational purchases, and tough competition. It's the same environment that caused Crocs to sell off nearly 10% just the other day. However, all may not be lost. Today's sell-off seems extreme given the specifics of the earnings, and digging deeper, there are still reasons to be optimistic on Coach today.

Yet, there is no denying that it's a tough time to be a luxury retailer. Coach may not deserve this sell-off, but that still may not make it a buy today. If you're looking for something a bit safer in today's environment, you might want to check out the stock that The Motley Fool's chief investment officer has selected as his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

Editor's note: At the 30-second mark, Austin meant to say "Crocs," not "Coach." The Fool regrets the error.